Do you know how you are compensated for the work that you do?
You may be surprised that there are many employees who have little understanding of how they are compensated for their work. How can that be possible? Aren’t employees motivated by money? If this is true, then why would they not know how to squeeze every penny out of their compensation plan and maximize it?
Over the last year, I have interviewed approximately 50 individuals soliciting feedback about their incentive compensation plan. Surprisingly, even though the industries and compensation plans were different, the interviewees stated similar concerns about how they were compensated for their work.
Here is a snapshot of some of the responses:
- Interviewees did not fully understand how they earned with their compensation plan
- The compensation plan was too complex
- The compensation plan was not communicated or trained effectively
- The compensation plan components did not reflect actual job duties in the field
The above concerns can lead to an unmotivated workforce which can turn into organizational or departmental goals being unmet. There is little room for error in today’s economy because it may determine the success or demise of an organization.
In this new economy, effective and aligned compensation plans can be an effective tool for harnessing individual, team, and organizational success.